Cryptocurrency trading is the speculation on price movements to buy or sell an underlying token via an exchange. As a new asset in the market, the crypto exchange can seem daunting for beginners and seasoned traders at times. The new terms and various processes take time to master.
Here are the crypto trading basics to get you started.
How does the cryptocurrency market work?
To understand crypto trading, you must, first of all, know how the crypto market operates. Crypto markets are decentralised such that they have no government or any single entity in control. Instead, the market depends on a network of computers located all over the world.
Unlike traditional coins, there is no physical cryptocurrency. It only exists as a digital record on a blockchain. It, however, operates like fiat currency with value and can be exchanged for products and services. The market allows various transactions. However, for a transaction to complete, the network of computers must verify it to avoid illegal transactions.
The cryptocurrency market is volatile with asset price changes due to various factors like supply, coin launches, market capitalisation, press, integration, and critical events.
How does cryptocurrency trading work?
Cryptocurrency trading is all about taking advantage of the price changes. The volatility of the market means any crypto asset can either rise or fall in value. To trade crypto, you are always looking to buy on the low while selling on the high for profits. Also, it’s important to understand the multiple crypto trading styles and strategies to choose from depending on expertise and expected earnings.
Before trading crypto, you should familiarise yourself with the risks involved. For example, high returns are never assured as various factors can affect the price of an asset. As such, you should keep using crypto trading tools like price charts and technical analysis.
How do you trade cryptocurrency in Australia?
Do you want to know how to trade crypto in Australia? It’s simple; Australia is one of the top countries in the world with a vibrant cryptocurrency culture. Furthermore, cryptocurrency trading in Australia has been legal since 2017. With this in mind, it’s become a popular way to invest.
To trade crypto in Australia, you first need to find a crypto trading platform. There are various crypto exchanges like CoinSpot, BTC Markets and Coinbase. Once you’ve identified the crypto exchange, sign up and verify your details.
Top up your account using various payment methods. Most crypto exchanges allow you to top up in AUD using options like credit cards and bank accounts.
Order the cryptocurrency you wish to trade, then store it safely. The storage depends on the trading type. A hot wallet is ideal for short-term trading strategies, like day trading, while a cold wallet is better for long-term trading.
How do you protect yourself when trading crypto?
Once you learn how to trade cryptocurrency in Australia, the next step is looking for safety measures. To avoid losing money, ensure you understand the market before trading. Look into the recent news, planned development, and general crypto market movement. Also, invest only in reputable tokens with a high market cap and trading volume. The reputable tokens also tend to come with high liquidity such that you can either sell or buy depending on the market movements.
The other way to protect yourself when trading crypto is to use reliable crypto exchanges. While multiple crypto exchanges are operating in Australia, you should only rely on reputable ones. CoinSpot is Australia’s largest crypto trading platform and one of the most secure, which is why we recommend it highly.
How you access your exchange account and wallet also matters. Invest in a secure wallet and keep it out of any unauthorised access.
What are some of the things to know before buying your first cryptocurrency?
Once you understand how to trade cryptocurrency, there are some things to know before buying your first crypto asset. The first is to understand the risk. Profits when trading cryptocurrency is not assured. For safety, only invest what you can afford to lose.
The other thing to know is the need for research. Crypto trading is a new concept. It is yet to stabilise, hence massive volatility. It is these market changes that you gain or lose from. So for profitable crypto trading in Australia, keep up with the market trends. Do your research on what is impacting the market. You should also research various trading strategies like day trading, trend trading, scalping and buy and hold. As the cryptocurrency market continues to grow, so do the products offered in the ecosystem, such as Crypto Derivatives.
Lastly, avoid crypto trading informed by the fear of missing out (FOMO). Don’t rush to buy or sell an asset only because others are doing the same. Instead, analyse every trade and only go in when sure of the move.